Global food markets: Climate impacts would be more costly than bioenergy effects

01/15/2014 - Ambitious greenhouse-gas mitigation consistent with the 2 degrees target is likely to require substantial amounts of bioenergy as part of the future energy mix. Though this does not come without risks, global food markets would be affected much more by unmitigated climate change than by an increased bioenergy demand, a study led by scientists from the Potsdam Institute for Climate Impact Research (PIK) now finds. Agricultural prices could be about 25 percent higher in 2050 through direct climate impacts on crop yields in comparison to a reference scenario without climate change. By way of contrast, a high bioenergy demand as part of a scenario with ambitious mitigation appears to raise prices only about 5 percent.

Effects on crop yields are strong, but vary widely across the globe. (Photo: Thinkstock)

The analysis has been published along with two other studies led by PIK in the course of the Agricultural Model Intercomparison and Improvement Project (AgMIP) in a Special Issue of the journal Agricultural Economics. The results show agriculture to be in the spotlight of climate change, both in terms of its need to adapt to climate impacts and its potential to mitigate global warming. Agricultural production and land-use change contribute about one third to global greenhouse-gas emissions.

First AgMIP study: Second-generation bioenergy to decarbonize the transport sector

“Second-generation bioenergy may become relevant especially in the longer term for reducing carbon emissions – for instance as biofuels in the transport sector, because other technical low-emission options such as electrification are relatively expensive,” lead-author Hermann Lotze-Campen says. Today’s bioenergy production of currently around 40 ExaJoule worldwide is dominated by traditional wood for heating and first-generation transport fuels like ethanol from sugar cane or bio-diesel from oil crops. While first-generation biofuels directly compete with food and feed production, second-generation biofuels have the potential to reduce that competition between food and energy markets and to also reduce production costs.

Global demand for second-generation bioenergy from crop and forest residues, wastes or purpose-grown plants like Miscanthus grass or poplar trees is assumed in the study to rise to about an additional 100 ExaJoule in 2050 (about 15 percent of total primary energy demand), if global warming is supposed to be limited to about 2 degrees above pre-industrial levels. Conducting a comparison between five agro-economic simulations, the study allows for the first time for a tentative conclusion that ambitious climate change mitigation with bioenergy need not drive up global food prices much.

In a comprehensive comparison of ten global agro-economic simulation models, Christoph Schmitz from PIK examined how much cropland will be used under different socioeconomic and climate change scenarios. “We find most models projecting an increase in cropland by 2050 that is more than 50 percent higher in scenarios with unabated climate change than in those assuming a constant climate,” Schmitz says. The increase would be 320 million hectare instead of approximately 200 million hectare – the difference equals roughly three times the size of Germany. Across all simulations, most of the cropland expansion takes place in South America and Sub-Saharan Africa. “Now this could be bad news as in those regions, in order to gain additional cropland, centuries-old rainforests are cut down. This does not only increase carbon emissions but also harms biodiversity and threatens important ecosystem services,” Schmitz explains.

So far projections of future land use have shown widely varying results due to large uncertainties in data and methods. To better understand the differences, the ten leading international modeling teams in this field sat together over a period of two years to learn from each other. The result is this unique multi-model comparison, which allows for more robust assessments and a better understanding of the connections between climate change, land use and agricultural prices.

Third AgMIP study: Effects on crop yields are strong, but vary widely across the globe

Future crop productivity and the role of climate impacts for economic simulations of food markets are at the center of a third study. Using a comparison of computer simulations, the study examines the challenges in quantifying in which regions climate change affects land productivity to which extent. “Potential climate change impacts on crop yields are strong but vary widely across regions and crops,” lead-author Christoph Müller from PIK says.

For the five major crops, i.e. rice, wheat, maize, soybeans and peanuts, the study finds a climate-induced decrease in yields of 10 to 38 percent globally until 2050 in a business-as-usual scenario of rising greenhouse-gas emissions, compared to current conditions. In terms of adaptation, there’s no one-fits-all response. Production could be shifted to regions with lower negative climate impacts; some other regions may profit from an intensification of agriculture. “To be able to cope with the big differences from one region to another, and from one crop to another, a more flexible global agricultural trading system would be needed,” Müller says.

A major step towards more robust assessments of climate impacts on agriculture

There are still considerable uncertainties in future agricultural projections – such as the CO2 fertilization effect, availability of additional agricultural land, or future rates of productivity increase. Yet the AgMIP results are a major step forward towards more robust climate impact assessments for agriculture. “Droughts like the one in 2012 in the United States can have huge impacts on crop production and exports,” Lotze-Campen says. “This illustrates that bad harvests in major production regions, even though limited in scope, can have significant impacts on global agricultural markets, prices and food security. This effect is likely to amplify under unabated climate change.”

About AgMIP:The Agricultural Model Intercomparison and Improvement Project (AgMIP) is a major international effort linking the climate, crop, and economic modeling communities with cutting-edge information technology to produce improved crop and economic models and the next generation of climate impact projections for the agricultural sector. It includes researchers at institutes including the Potsdam Institute for Climate Impacts Research (PIK), the International Food Policy Research Institute (IFPRI) and the International Institute for Applied Systems Analysis (IIASA), among others.